Water Industry News

Southern California Water requests 27% increase

By Jason Newell
Staff Writer

SAN DIMAS - Residents blasted a plan to raise water rates in Claremont and San Dimas as "bloated" and "excessive" Thursday, urging a judge to help spare them from a large spike in charges.

With Administrative Law Judge Maribeth Bushey listening, a steady stream of residents rattled off complaints about Southern California Water Co. and questioned its justification for seeking a 27 percent increase in rates in the next three years.

"This rate is absolutely unacceptable and beyond belief," Claremont Mayor Sandra Baldonado testified during the first of two state-sponsored hearings held Thursday aimed at gathering public input.

Southern California Water applied to the state for the rate increases in February, saying they are necessary to keep up with the rising costs of buying water, meeting drinking water health standards and paying for facility upgrades.

The application seeks a 24-percent rate increase across its Region III in 2006 and 1.5 percent increases in both 2007 and 2008.

The water company has since said it will push for smaller increases about 20 percent in 2006 and about 1 percent in each of the following two years.

The state's Public Utilities Commission, which has the final say about the water company's rates, held Thursday's hearings to gather public testimony. Following the public hearings and future evidentiary hearings, Bushey will make a recommendation to the commission, which will issue a decision about what residents will pay.

"That process should be completed sometime this winter, by the end of the year," said Keith Switzer, the water company's vice president for regulatory affairs.

During a brief presentation to residents, Switzer said the higher rates are needed to help offset the higher costs of buying water from other agencies, meet stringent treatment standards and to replace pipes and wells.

"We have a lot of pipes in the ground, as well as other assets, and a lot of it is getting old," he said.

Residents and city officials countered, saying that under the company's rate structure, they pay extra to help subsidize customers throughout Southern California Water's Region III, where rates ought to be higher. The region includes remote areas such as Barstow, Apple Valley and Morongo Valley.

Claremont and San Dimas ought not be charged the same rates as people living in the desert or the mountains, Baldonado argued.

"We need to stand alone, with San Dimas, as a district in this region," she said.

Several residents also urged state officials to take the water company's justifications for the increases with a grain of salt, saying the company has shown a pattern of asking for much more than it needs, anticipating that the state will approve a smaller rate.

"Southern California Water has a history of coming in with highball requests," Claremont resident Ludd Trozpek said. "Their cost estimates ... are always bloated. They're always justified in an unjustified way."

The water company last pushed for rate increases in 2003, when it sought an increase of 38 percent in Claremont and 40 percent in San Dimas during a three-year period.

Following a lengthy process that included strong public outcries and lobbying from city halls, the PUC eventually approved much smaller increases: about 12 percent in Claremont and 13 percent in San Dimas.

Ken Duran, San Dimas' assistant city manager, urged Bushey to take that track record into account, calling the latest request "excessive."

Switzer disputed claims that the company had ballooned its rate requests, saying the company is required to lay out in detail why the money is needed.

"We have to defend any part of the increase," he said. "The way the process works, you're looking forward three years, and you have to anticipate all the things you need to do."

Jason Newell can be reached by e-mail at jason.newell@dailybulletin.com or by phone at (909) 483-9338.